Arkoma-STACK player Corterra Energy offers assets to potential new owners

TULSA — Corterra Energy, a private equity-backed exploration and production company active in southeastern Oklahoma’s Arkoma STACK play, has offered to sell at least some (if not all) of its operations.

The company is placing its oil and natural gas/liquids producing properties, leasehold and related assets in Hughes, Coal and Pittsburg Counties on the block, an announcement issued this week stated.

The offering, handled by Detring Energy Advisors of Houston, does not disclose how much Corterra seeks for what it wants to sell. It also doesn't specify whether the sale represents the entirety of the company's ongoing operations.

It does, however, say that the sale includes the assets’ annual current operational cash flow of about $9 million, underpinned by 241 wells, 100 of which Corterra operates.

According to information provided by Detring, the assets Corterra is selling offers the buyer a chance to acquire “a significant operated and non-operated liquids-rich position” across active Woodford development, including substantial current production, cash flow and access to multiple, proven, stacked-pay horizons.

It states the assets’ current average daily production is about 24 million cubic feet (equivalent), with 24% of that liquids.

It estimates the offering’s proved, probable and possible reserves at about 1.2 trillion cubic feet, carrying a value of about $260 million. It states Corterra has about 120 billion cubic feet of proved, developed producing reserves, carrying a value of about $65 million.

The sale includes about 65,600 acres (about 55% operated and about 65% held by production) that includes rights to more than 1,000 potential drilling locations for wells that could target the Woodford and Mississippian formations.

Its holdings, the offering says, include large, contiguous positions that would enable the buyer to either drill or participate in wells where extended laterals could be drilled across targeted formations.

In addition, Corterra has further de-risked its acreage through an active drilling program where valuable core and log data were collected, the information reports.

A short run?

It wasn’t clear Thursday whether a sale of the assets would end Corterra’s existence.

The company, founded in 2016, is led by CEO Valerie Mitchell and backed by private equity investor White Deer Energy. Mitchell didn't respond Thursday to a request for comment.

Corterra significantly boosted its presence in the Arkoma STACK play in October 2017, when it announced it had spent $68 million to acquire 26,000 acres and interest in over 400 producing wells there from Continental Resources.

Corterra officials said at the time the deal created a contiguous position of nearly 70,000 acres for it to explore across Atoka, Coal, Hughes and Pittsburg counties.

(Story continued below...)

“We have built a premier asset in the liquids-rich portion of the Arkoma Woodford Shale play," Mitchell stated as part of that announcement.

Soon after, it inked a deal with a midstream company to get a natural gas gathering system and natural gas processing plant built to support it and another operator in the play.

Connect Midstream began processing natural gas at its Stanberry plant in Coal County a year ago.

And in November 2018, Corterra was honored as one of The Oklahoman’s Top Workplaces winners.

This week, Detring Energy Advisors stated as part of the sale announcement that it will open a virtual data room at detring.com for potential buyers to review.

Melinda Faust, Detring’s managing director, is listed as a contact point for the sale and can be reached at mel@detring.com to obtain additional information, the company’s website and promotional material related to the sale show.

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional...
Read more ›